How Timeshares Work

Timeshare prices can vary tremendously based on share size, location and time of year, not to mention all the variables that affect any other real-estate value, ­such as condition of the property and the market for timeshares at the time. A new (or retail) timeshare usually sells in the neighborhood of $10,000, although that can vary by thousands of dollars in either direction. Purchasing a used timeshare can be significantly cheaper, with prices as low as $1,500.

The initial purchase price is not the only cost to consider, however. All timeshare resorts charge share owners annual fees for maintenance, utilities and taxes. Annual fees in the $300 to $400 range are typical, although larger shares or peak-season shares can have higher annual fees, often more than $1,000 every year. These fees are due whether the share owner uses the property or not. Resorts can increase the fees each year -- the initial fees at the time you buy are not locked in. However, some timeshare contracts include a specific clause that limits future fee increases. Sometimes, the annual fee does not cover property taxes, so share owners would then be responsible for those costs, as well.

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Timeshare resorts will also tack on extra real-estate fees when the share is sold, such as a transfer fee and a recording fee. If the resort decides to make a major improvement to the property, or it has to make major repairs, it might be able to assess a large fee to the shareowners to cover the costs. Check the terms of your timeshare contract carefully to see if the resort could hit you with a large, unexpected assessment fee in the future.

Another hidden cost that is easily forgotten is the cost of travel. Owning a timeshare is useless if you can't afford to get to it. Flying to Mexico or Florida or Colorado every year could grow very costly.